Repeals: TITLE 2-OPERATION AND MAINTENANCE OF THE CANAL AND GOVERNMENT OF THE CANAL ZONE GENERALLY * CHAPTER 2. ACCOUNTING FOR FUNDS * [32. Accounting by collecting officers of Panama Canal.-The collecting officers of the Panama Canal shall render ttheir accounts in such detail, and shall transmit with their accounts to the General Accounting Office all such papers, records and copies relating to their transactions as collectors, as shall be prescribed in regulations approved by the President, and, in his judgment, not incompatible with the methods of accounting prescribed in the Budget and Accounting Act, 1921 (U. S. Code, title 31, ch. 1).] [33. Examination of accounts by persons detailed from General Accounting Office. In prescribing regulations under the provisions of the next preceding section, the President shall provide that in lieu of furnishing to the General Accounting Office individual detail collection vouchers, two competent persons from the General Accounting Office, designated by the Comptroller General, shall be sent at such time as may be designated by the Comptroller General, to the Canal Zone to examine the accounts and vouchers and verify the submitted schedules of collections, and report in duplicate to the General Accounting Office and the Auditor of the Panama Canal; and such persons shall make such other examination into the accounts of the Panama Canal as may be directed by the Comptroller General, and for all such purposes they shall have access to all records and papers pertaining thereto. Such persons shall be furnished transportation and traveling expenses out of such appropriations for the Panama Canal as may be designated by the Governor.] CHAPTER 4. BUSINESS OPERATIONS; SALES AND SERVICES [Sec. 51. AUTHORIZATION FOR ESTABLISHMENT AND OPERATION OF VARIOUS FACILITIES. (a) In connection with the operation, maintenance, sanitation, and civil government of the Panama Canal and Canal Zone, the President is authorized to establish, maintain, and operate, through the Panama Railroad Company, or otherwise, docks, wharves, piers, drydocks, shops, yards, marine railways, salvage and towing facilities, dredging facilities, construction facilities, fuelhandling facilities, motor-transportation facilities, civil air terminals, power systems, water and sewer systems, warehouses, storehouses, hotels, a printing plant, living quarters and other buildings, and any other necessary facilities and appurtenances, for the purpose of providing, at reasonable prices, fuel, electric power, water, equipment, supplies and materials generally, repairs, labor transportation, quarters, space in buildings, wharf and like services, hotel and restaurant services, and services generally, including recreational services, and for the purpose of assembling, assorting, storing, repairing, and selling scrap and other byproducts of manufacturing and shop operations, and materials, supplies, and equipment purchased or acquired for the construction, improvement, operation, maintenance, sanitation, or civil government of the Panama Canal or Canal Zone and which are obsolete, unserviceable, or no longer needed. The sales, services, equipment, supplies, and materials hereinbefore referred to may be made or furnished to vessels, to agencies of the Government of the United States, to the Panama Railroad Company, to employees of the Government of the United States or of the Panama Railroad Company, and to any other governments, agencies, persons, corporations, companies, or associations eligible to make or receive such purchases, services, supplies, or materials under the laws prevailing at the time and the policies heretofore or hereafter adopted consistently with such laws. (b) In the event the President has heretofore elected, or shall at any time hereafter elect, to maintain and operate through the Panama Railroad Company any of the facilities and appurtenances referred to in this section or section 52 of this title, theretofore maintained and operated by the Panama Canal, the President is authorized to transfer to the Panama Railroad Company all or as much as may be determined to be necessary of the personnel, property, records, related assets, contracts, obligations, and liabilities of or appertaining to the said facility and its appurtenances, and such transfer shall be deemed to have been accepted and assumed by the Panama Railroad Company without the necessity of any act or acts on the part of the said corporation except as otherwise stipulated in provisions of law applicable to the said corporation.] [52. ORGANIZATION AND CONDUCT OF ANY SUCH FACILITIES BY PANAMA CANAL AS A "BUSINESS OPERATIONS".-The President may cause any or all of the facilities and appurtenances referred to in paragraph (a) or (b) of section 51 of this title to be organized and conducted by the Panama Canal as "business operations", and in such case the aggregate net profit if any accruing from the conduct of such business operations shall annually be covered into the Treasury of the United States.] [53. RECEIPTS FROM SUCH OPERATIONS, SALES, AND SERVICES; EXPENDITURE AND REINVESTMENT; REPORTS.-The moneys received by the Panama Canal from the operations authorized by sections 51 and 52 of this title, and from pilotage, quarantine, immigration, and like services, from rentals, from damage claims, and from any and all other sales made and services rendered, but not including tolls, taxes, court fees, or fines, may be expended or reinvested under the several heads of appropriation for the Panama Canal, without being covered into the Treasury of the United States except as provided in section 52 of this title; but, except as otherwise provided in this section, such funds shall be subject to the provisions of law relating to public funds of the United States. Monthly reports of such receipts and expenditures shall be made to the President and annual reports shall be made to the Congress.] [54. EXCEPTION OF CANAL ZONE POSTAL SERVICE. The provisions of sections 51 to 53 of this title shall have no application to operations of the Canal Zone Postal Service.] CHAPTER 23. TOLLS FOR USE OF CANAL [414. Refund of amounts erroneously received as tolls.-There is appropriated, out of any money received as tolls, before such money is covered into the Treasury as miscellaneous receipts, amounts necessary to refund to the parties entitled thereto amounts which have been or may hereafter be erroneously received as tolls and covered into the Treasury as miscellaneous receipts.] GENERAL PROVISIONS Sec. 2. Except as otherwise provided in, or where inconsistent with, the provisions of this Act, the terms "the Panama Canal," "the Canal," and "the Canal authorities," wherever appearing in the statutes of the United States and having reference, prospectively, to the agency heretofore known by those names, are amended to read "the Canal Zone Government." Sec. 3. Except as otherwise provided in this Act, the title "the Governor of the Panama Canal," wherever appearing in the statutes of the United States, is amended to read "the Governor of the Canal Zone." Sec. 4. Except as otherwise provided in, or where inconsistent with, the provisions of this Act, the term, "the Panama Railroad Company," wherever appearing in the statutes of the United States and having reference, prospectively, to the corporation heretofore known by that name, is amended to read "the Panama Canal Company." Sec. 29. Except for section 256 of title 2 of the Canal Zone Code, as added by section 22 of this Act, this Act shall take effect upon the effective date of the transfer to the corporation, pursuant to the provisions of said section 256, of the Panama Canal together with the facilities and appurtenances related thereto. Repeals: Title 10, Section 721: UNITED STATES CODE [Sec. 721. Housing of officers serving in Canal Zone. Officers of the Army pertaining to the United States troops serving in the Canal Zone shall not be required to pay rent for the occupancy of houses of the Panama Canal to which they may be assigned.] The provisions of this chapter and section 1346 (b) of this title shall not apply to [(g) Any claim arising from injury to vessels, or to the cargo, crew, or passengers of vessels, while passing through the locks of the Panama Canal or while in Canal Zone waters.] Title 31, Section 621: [Sec. 621. SAME; FOR PANAMA CANAL. The estimates of appropriations for the Panama Canal shall be submitted annually in detail, showing the amounts required for personal services and the amounts required for material including all supplies, under the heads of construction, maintenance, operation, sanitation, and civil government, and following each there shall be submitted notes giving in parallel columns information which will show the number, by grade or classes, of officers, employees, and skilled and unskilled laborers proposed to be paid under each of said appropriations for the ensuing fiscal year and those paid at the close of the fiscal year next preceding the period when said estimates are prepared and submitted; also, in connection with each item for material and miscellaneous purposes other than salaries or pay for personal services, the amounts actually expended or obligated, quantities purchased, and prices paid for material or supplies during the entire fiscal year next preceding the preparation and submission of said estimates. [There shall also be submitted in connection with the foregoing information, statements of actual unit cost of all construction work done, and of estimated unit cost of work proposed to be done, for the fiscal years included in the notes so required to be submitted with the annual estimates.] [Sec. 1361. Congressional declaration of purposes and policy [It is the policy of this Act, incorporating the Panama Railroad Company pursuant to section 869 (b) of Title 31, for the purpose of conducting business activities incident to the care, maintenance, sanitation, operation, improvement, government, and protection of the Panama Canal and Canal Zone; to preserve the authority vested in the President by the Panama Canal Act of August 24, 1912; to govern and operate the Panama Canal and govern the Canal Zone, or cause them to be governed and operated, through a Governor of the Panama Canal and such other persons as he may deem competent to discharge the various duties connected with the care, maintenance, sanitation, operation, government, and protection of the Canal and Canal Zone. Also it is the policy of sections 1361-1361j of this title that the operations in the Canal Zone shall continue to be coordinated, through the President, in order that the responsibility for and authority over this important utility shall not be divided. Mr. THOMPSON. I was going to ask for just such a thing, because I can tell what they are much more easily through that comparative print or some other expedient of that nature. Mr. FUGATE. Governor, you do not think, then, that the proposal here as set out by the Bureau of the Budget, could be enacted without these other sections being a part of the bill? Governor NEWCOMER. I think, from an administrative viewpoint it would leave us suspended in the air without adequate authority for the things that we must do under the new organization, and that those provisions suggested for omission are not controversial and are rather simple after a brief explanation has been made. It would be an incomplete bill if passed without those sections. Mr. FUGATE. It is your idea, then, that if these basic sections are accepted, then these other sections should be made a part of the bill? Governor NEWCOMER. Yes, sir, I think they should. Mr. FUGATE. You would not be willing to delete them? Governor NEWCOMER. I would much prefer not to see them deleted. It would be necessary sometime to take them up in a separate bill, and in the meantime we would be operating without the necessary legislative authority for doing the things we would have to do, and there would be certain conflicts existing. For instance, one section proposed to be omitted amends a section of the existing law which, by another section of this bill, is to be revoked. Now, the sections that would revoke those provisions of existing law, apparently, are intended to remain in this bill, so you revoke something without substituting something else for it. Mr. THOMPSON. Governor, what I think gives us most concern is the approaching, we hope, adjournment of Congress. Anyone with any legislative background at all knows that when you try to bring up a complicated measure in the closing weeks or, perhaps, closing days of a session, it is almost impossible to get it through. You get it through one House and it may be hung up in the other. The legislative course that lies ahead of this bill, as it is now written, would tax the ingenuity of the most experienced Members of Congress. I think that is the reason why the chairman tried to get the Defense Department and the Department of the Army to relieve us of some of the extraneous matter. As the bill originally came out of the Executive Office of the President it was a very simple piece of legislation and one that, in all probability, could pass. Do you favor the legislation, the broad principles of it? Governor NEWCOMER. I think that there are some principles involved here that require and should receive very careful consideration, namely, the policy requiring that the Panama Canal be self-supporting. I think it is unquestionably the policy of the United States to keep the Panama Canal in operation regardless of the conditions that may exist either with respect to the military situation or economic conditions throughout the world. This is a violent departure from the principles that have governed heretofore in the operation of the Panama Canal. There is another principle, that the revenues derived from tolls of this corporation will not fully cover the cost of Government and health functions that are necessary to the over-all conduct of operations in the Canal Zone. That is a major departure from the past policy of the Congress, and I think that should receive very serious consideration. Mr. THOMPSON. It certainly would be helpful for me, speaking as an individual member of this committee, who has given a great deal of thought, and much of it with you, to the future of the Canal and the business aspects of it, to know just where we do stand, if we are trying to pass legislation or not I think the only principle that influences the members of the subcommittee to try to straighten out the Panama Canal business aspects is the fact that you cannot tell just exactly what should be charged against tolls, and you cannot tell just exactly what should be charged to national defense. I think we are going to have to decide that. If we are going to meet opposition along the way I think we ought to know it now and possibly straighten it out before we go further. Governor NEWCOMER. I do not mean to give the impression that I am opposing this bill. I think it is entirely a matter for the Congress to determine, but I think that those are two important factors. That is, they should be seriously considered as to whether they are in line. with the policy of the United States with respect to the operation of the Panama Canal. Mr. THOMPSON. Of course, if the Panama Canal is to be run as an adjunct of the Department of Defense rather than as a commercial operation, then immediately the shipping people, will say, "Well, all right, if it is a national defense function then let them pay for it." Governor NEWCOMER. I do not mean to imply that I think it would ever be run purely as a national defense operation. It certainly has justified itself as a commercial waterway, operated for the benefit of the commerce of the world. I think it undoubtedly would have been built for that purpose. For that purpose alone experience has justified or indicated that such a course would have been justified if, actually, it was not done for that purpose. Mr. THOMPSON. That was the dream that originally started the Canal, was it not-to expedite the transportation of the sea-borne commerce of the world from one ocean to the other without having to go all of the way around the Horn? Governor NEWCOMER. Yes, sir; going away back to the sixteenth century. Mr. THOMPSON. Thank you, Mr. Chairman. Mr. ALLEN. Mr. Chairman, I wonder if the Governor would explain a little more fully the statement on page 6 of his statement, subparagraph 2. I am particularly interested in knowing what is "the net direct investment of the United States." What is considered in that, what is the net? Governor NEWCOMER. In figures the net direct investment is about $534,000,000, that being the cost of producing the present waterway. That would then include no added costs because of its use in connection with the defense of the United States. Of course, there are no costs there involved in the fortifications, the barracks, or the cost of upkeep of the Military Establishment in the Canal Zone.. Mr. ALLEN. Then, do I take it that is the amount which has been spent on the Canal, not including any amounts spent for fortifications or military establishments in the vicinity of the Canal? Governor NEWCOMER. Yes, sir; that is correct. Mr. ALLEN. What is net about it, what is the meaning of the word "net"? Governor NEWCOMER. There has been depreciation of about $1,500,000 over the years included in our operating costs. So, when you say, "net" it is the present net investment after taking into account the capital additions and the depreciation that has occurred over the years. Mr. ALLEN. Then it is the cost less an amount for depreciation? Mr. ALLEN. And in that direct investment there is no assignment of any part of the cost of the canal itself as being part of the cost of the military installations? Governor NEWCOMER. No, sir; that is correct. Mr. ALLEN. Thank you. Mr. O'TOOLE. I think that is all, Governor, thank you very much. At this point the Chair would like to interrupt for a moment to state for the record that Mr. Sims, of the Legislative Section of the State Department, phoned this morning and said that the State Department had no objection to the enactment of this legislation, that it does not interfere with any treaty provisions of any kind. Mr. Harold Seidman, of the Bureau of the Budget. 69057-50-4 |